# MIP40c3-SP90: GovAlpha Core Unit DAI Budget 2023-2024 ## Preamble ``` MIP40c3-SP#: 90 Author(s): @Patrick_J, @prose11 Contributors: Tags: budget, cu-budget, gov-001 Status: Obsolete Date Applied: 2023-02-07 Date Ratified: N/A Budget Start Date: 2023-04-01 Budget End Date: 2024-03-31 Forum URL: https://forum.makerdao.com/t/mip40c3-sp90-govalpha-core-unit-dai-budget-2023-2024/19712 Ratification Poll URL: https://vote.makerdao.com/polling/QmXoH4rE Extra: This budget has been marked as obsolete as per the changes introduced in [MIP40](https://mips.makerdao.com/mips/details/MIP40) via [MIP102c2-SP1](https://mips.makerdao.com/mips/details/MIP102c2SP1). ``` ## Sentence Summary MIP40c3-SP90 provides voters with a choice of three DAI budgets for the GovAlpha Core Unit for 12 months, starting on 2023-04-01 and ending on 2024-03-31. ## Paragraph Summary MIP40c3-SP90 provides voters with a choice of three DAI budgets for the GovAlpha Core Unit for 12 months, starting on 2023-04-01 and ending on 2024-03-31. All three budgets represent an overall reduction in DAI amount requested from last year, with a minimum reduction of 18.47% and a maximum reduction of 39.19%. DssVest will be used to implement the chosen budget through a 12-month stream. ## Specification ### Motivation We are proposing this Core Unit Budget because GovAlpha requires an operating budget to fulfill its mandate. As MakerDAO pivots towards the Endgame launch, currently scheduled for 2024, the presence of an experienced Governance team is crucial. As well as our current roles and responsibilities defined in our mandate and various MIPs, GovAlpha is taking an active role in Governance and Ecosystem design for the Endgame Plan and taking over some of the roles and responsibilities of the offboarded GovComms Core Unit. We will use this budget to fulfill our mandate as well as work towards the implementation and goals of the Endgame Plan as approved by MKR voters. This work will include, but is not limited to: #### Business as usual - Overall management and coordination of the Governance process as defined by the relevant MIPs - GovAlpha facilitators are the only individuals able to create polls on the MakerDAO voting portal. - Responsibility for following up on approved Governance Polls to ensure appropriate action is taken by other Core Units or actors. - Coordination of Executive Votes: - Liaison with engineering teams. - Ensuring all items have followed the approved Governance processes. - Ensuring accuracy of Executive Vote contents by ensuring all relevant parties have confirmed details pertinent to their mandates. - Writing and delivering Executive Vote copy to PE. - Sole permission to post Executive Votes to the voting portal UI. - Notifying the community of new Executive Votes. - Liaising with Recognized Delegates and other large voters to ensure that the Maker Protocol remains secure. - Responsibility for managing urgent and emergency processes. - Ensuring that the voices of Governance participants are heard through the voting system. - Management of the Recognized Delegate program. - Point of contact for new Recognized Delegates. - Responsible for tracking Recognized Delegate voting metrics. - Hosting Meet Your Delegate calls for new Recognized Delegates. - Responsible for calculating Recognized Delegate compensation and ensuring it is paid out in an Executive Vote. - MIPs management and editing. - Forum and Discord moderation. - Advice to internal and external parties on navigating the Maker Governance process. - Management and updating of the [Maker Operational Manual](manual.makerdao.com). - Hosting the weekly Governance and Risk Call. - Ad hoc completion of tasks that need to be done but are not otherwise covered by Core Unit mandates. #### Endgame Specific roles - Managing the Governance processes required for the transition to Endgame - we view this as crucial. - Taking a leading role in Endgame Governance and Ecosystem design. - Participating in the drafting of the Scope Frameworks. - Developing an Arbitration Framework for the Arbitration Scope. - Providing expert input to the Governance Security Scope. - Taking a specific interest in the drafting of the Endgame Constitution. - Actively developing a documentation site for the Endgame in collaboration with SES-001 modeled on the [Maker Operational Manual](manual.makerdao.com). #### Absorbing GovComms Roles The Base option will allow us to more effectively absorb some of the roles and responsibilities of the GovComms Core Unit, which has applied for formal offboarding. The high-value functions that we are aiming to continue are: - Call Support on request for all members of the DAO/Community. - Hosting of Delegate Office Hours and other calls. - Management of the MakerDAO Calendars. - Subreddit Moderation. - Ownership of various trackers. #### BasePlus vs. Base vs. SuperBear We are providing an BasePlus, Base, and SuperBear option for our budget. The Base option should allow us to achieve all of the above-listed activities, including the listed GovComms responsibilities, with minimal disruption. The SuperBear option will require us to cut back on the former GovComms roles to an operational minimum, for example, not offering Call Support to other Core Units and abandoning trackers. The expectation that GovAlpha might fully absorb the role of GovComms without any additional workforce or funding is unrealistic. Therefore, we are providing Governance an BasePlus option identical to the Base option but budgeting an extra 7,500 DAI per month for compensation. This additional funding will allow the hiring of a new team member/members to provide a more holistic adoption of GovComms roles, including developing the Emergency Playbook and allowing more professional management of call support, summaries, reports, and video editing, among other items. Note that the [last approved GovComms budget](https://mips.makerdao.com/mips/details/MIP40c3SP62#budget-breakdown) budgeted an annualized amount of approximately 420,000 DAI for compensation and benefits. The additional funding we request to cover their high-impact work is around 20% of this amount. ### Facilitator Pay Matrix The Facilitator Pay Matrix is unchanged from our previous budget. The Facilitators are not requesting a change to the Base Pay for a Governance Facilitator in this budget cycle. Facilitator pay for GovAlpha Facilitators remains among the lowest in the DAO. | Base Pay | 126,000 | |----------|---------| | | Multiplier | Explanation | |--------------------------|------------|-------------------------------------------------------------------------------| | Commitment - Partial | 0.8 | Part Time commitment, 20 hours per week minimum. | | Commitment - Full | 1 | Full Time commitment, 35 hours a week minimum. | | Experience - Limited | 0.7 | New to the role, would not be able to fulfill responsibilities alone. | | Experience - Moderate | 1 | Confident in the role, capable of fulfilling critical responsibilities alone. | | Experience - Experienced | 1.5 | Experienced in the role, capable of fulfilling all responsibilities alone. | | | Partial Commitment | Full Commitment | |--------------------------|--------------------|-----------------| | Experience - Limited | 70,560 DAI | 88,200 DAI | | Experience - Moderate | 100,800 DAI | 126,000 DAI | | Experience - Experienced | 151,200 DAI | 189,000 DAI | ### Core Unit ID - GOV-001 ### List of Budget Implementations ##### Multisig Details - 2-of-3 multisig - [0x01D26f8c5cC009868A4BF66E268c17B057fF7A73](https://gnosis-safe.io/app/eth:0x01D26f8c5cC009868A4BF66E268c17B057fF7A73/balances) (govalpha.eth) - Keyholder A: @Patrick_J - [0x06ADa798f9323392cA30C755383Af879bd853168](https://etherscan.io/address/0x06ADa798f9323392cA30C755383Af879bd853168) - Keyholder B: @prose11 - [0xf3ED2bdeBa77940E6759B806cd55CE20cAE369BE](https://etherscan.io/address/0xf3ED2bdeBa77940E6759B806cd55CE20cAE369BE) - Keyholder C: @0xdeniz - [0x388e9e5a889C4cDF3f752C1AFcF88B75BDE673eE](https://etherscan.io/address/0x388e9e5a889C4cDF3f752C1AFcF88B75BDE673eE) - 1 billion DAI, 1 billion USDC, and 1,000 ETH spending limits are in place for the MakerDAO PauseProxy. - It should be considered owned by MakerDAO and administered by GovAlpha. See details [here](https://forum.makerdao.com/t/update-to-the-govalpha-multisig/19565). ##### 1. Smart Contract Budget Implementation - Using DssVestSuckable - [0xa4c22f0e25C6630B2017979AcF1f865e94695C4b](https://etherscan.io/address/0xa4c22f0e25C6630B2017979AcF1f865e94695C4b) - Authorization Required: `Vat_Suck` A total of 904,805, 805,805, or 674,905 DAI will be streamed to [0x01D26f8c5cC009868A4BF66E268c17B057fF7A73](https://etherscan.io/address/0x2cc583c0aacdac9e23cb601fda8f1a0c56cdcb71) starting at 2022-04-01 and ending at 2023-04-01. The amount to be streamed will depend on which budget option is selected by MKR voters. ### Reporting Transparency *Note that we have changed our budget line items to align with those displayed on the [SES Expenses Dashboard](expenses.makerdao.network).* GovAlpha maintains a publicly accessible spreadsheet that details all transactions from the multisig. It can be found [here](https://docs.google.com/spreadsheets/d/1IhTFGRh3NGL3Kp6TXj035T-898zHBSc2epEZGOPAF2k/edit#gid=0). #### Budget Breakdown | Expense Category | Previous Budget | BasePlus Option (% Change) | Base Option (% Change) | SuperBear Option (% Change) | | -------- | --------: | --------: | --------: | --------: | | Compensation & Benefits | 585,750|702,250 (+19.89%) | 612,250 (+4.52%) |577,250 (-1.45%) | | Travel & Entertainment |40,000 |32,000 (-20%) |32,000 (-20%) |20,000 (-50%)| | **Headcount Expense Subtotal** | **625,750**|**734,250 (+17.34%)** |**644,250 (+2.96%)** |**597,250 (-4.55%)** | | | | | | | Governance Programs |260,000 |72,000 (-72.31%) |72,000 (-72.31%) |0 (-100%)| | Gas Expenses |20,000 |10,000 (-50%) |10,000 (-50%) |10,000 (-50%)| | Software Expense |200 |300 (+50%) |300 (+50%) |300 (+50%)| | Software Development Expense |33,000 |6,000 (-81.82%) |6,000 (-81.82%) |6,000 (-81.82%)| | **Non-Headcount Expenses Subtotal** |**313,200** |**88,300 (-71.81%)** |**88,300 (-71.81%)** |**16,300 (-94.80%)**| | | | | | | *10% Contingency* |140,843 |82,255 (-41.60%) | 73,255 (-47.99%) |59,355 (-57.86%)| | *Continuity* | 30,000 | 0 (-100%)| 0 (-100%)|0 (-100%)| | **Grand Total** |**1,109,793** |**904,805 (-18.47%)**|**805,805 (-27.39%)** |**674,905 (-39.19%)**| ##### Compensation & Benefits This line item combines pay for Core Unit Facilitators and Contributors. The Base option is a minor increase from the budgeted amount for last year. This will allow us to absorb the additional responsibilities of EndGame and some of the offboarding GovComms Core Unit’s functions listed in this Subproposal. The SuperBear option is a decrease in last year’s budget. This saving has partially been funded by a reduction in Facilitator expenses as LongForWisdom stepped down and by reducing the hours available for our Contributors. The BasePlus option budgets an extra 7,500 DAI per month for compensation to allow a more holistic adoption of GovComms roles, including developing the Emergency Playbook and allowing more professional management of call support, summaries, reports, and video editing, among other items. We have cultivated an excellent team of contributors at GovAlpha. We intend to offer all non-facilitators a 5% cost of living adjustment, below inflation - OECD rate of 10.3% at the time of writing ([source](https://data.oecd.org/price/inflation-cpi.htm)). This will apply regardless of the option chosen by voters. It is worth recognizing that we under-budgeted for Contributors in our last budget - see Quarterly Reports. This is why the Compensation & Benefits category changes may appear underwhelming at first glance. However, savings have been achieved as two team members have moved on from GovAlpha in recent months, although we expect to welcome back @hernandoagf on a part-time basis after his secondment to DUX is complete. ##### Travel & Entertainment We have routinely been under budget on Travel Expenses this year. We do not expect an increase in Travel Expenses in the coming year, so we are comfortable reducing this line item significantly in both budget options. The Base option provides more flexibility. ##### Governance Programs The significant savings in this budget category stem from the end of the Sourcecred Program. Despite researching various options to replace this program, we still need to be convinced that any alternatives we have reviewed provide good value for money for the DAO. Therefore, we are proposing to remove participation incentives entirely from our budget. Again, this represents significant savings to the DAO. The Base and BasePlus options budget 72,000 DAI for our [off-chain proposal bounty program](https://manual.makerdao.com/governance/off-chain/proposal-bounties) to continue. The SuperBear option removes funding for the bounty program entirely. ##### Gas Expenses These are primarily fixed costs, hence why all budget options have the same amount budgeted. The main gas expenses for GovAlpha are: - Poll creation. - Interacting with our Operational Wallet. - Performing our role as Auditors on the CES and SES Auditor Wallets. Our Operational Wallet currently holds 3.70 ETH, and there will only be an expenditure from this budget category once this has been exhausted. ##### Software Expense This line item covers the fees for using Request Network to pay Contributor invoices. Request Network has increased its fees over the past year, so the budgeted increase is unavoidable. This is a fixed expense but remains significantly cheaper than alternatives, such as Accountable, that are used by other Core Units. ##### Software Development Expense This line item covers the 500 DAI per month stipend contributed by GovAlpha that covers some of the running costs of the [DaiStats website](https://daistats.com/#/). This is a fixed expense which is unchanged from last year's budget. The reductions in this category have been achieved as our previously budgeted projects for the MIPs Portal, and Status UI have been formally handed over to GovAlpha by DSpot with no further projects planned. ##### Contingency We have budgeted 10% in Contingency funds for each budget option. This is a reduction from the 15% budgeted last year. We have used very little of our Contingency Budget over the past year and are confident that 10% will provide sufficient headroom if required. ##### Continuity Buffer We are not requesting any additional funds for our Continuity Buffer. Currently, the Continuity Buffer holds 90,000 DAI and 89,993.83 USDC. Funds in the Continuity Buffer are to be used to keep the Core Unit operational for three months in case of a lack of funding due to an emergency in the Maker Protocol, e.g., Surplus Buffer depletion. It will also meet obligations and act as bridge funding if the GovAlpha Core Unit is offboarded by Governance. ### Budget Term - Start Date - 2023-04-01 - End Date - 2024-03-31 ### Increasing Value to Maker Tokenholders We believe that GovAlpha's role is crucial to the operational effectiveness of MakerDAO. We believe that while hard to quantify, this provides a great intangible benefit to the DAO and, by extension, to MKR holders. ### Headcount Planning / Team Summary At the time of writing, the GovAlpha team consists of the following members: #### Facilitators - @prose11 - Full-Time Facilitator - Experienced - @Patrick_J - Full-Time Facilitator - Moderate Experience #### MIP Editors - @blimpa - Part-Time MIP Editor - @Gala - Part-Time MIP Editor #### Contributors - @LongForWisdom (LFW) - Part-Time Contributor and Project Lead - @Sebix - Part-Time Contributor - @AstronautThis - Part-Time Contributor @hernandoagf was working as a GovAlpha contributor before joining the DUX team temporarily. We expect that during this budget period, Hernando will return to GovAlpha on a Part-Time basis. Besides the two full-time Facilitators, GovAlpha remains primarily composed of part-time contributors working under flexible hours. We reflect the DAO’s spirit internally, encouraging our workforce to take on assignments and projects that interest them. Due to this, it is hard to provide a precise value for FTE as contributors’ time commitments will vary monthly. The Core Unit currently averages between 3.75 and 4.25 FTE at a conservative estimate. However, the BasePlus option will likely see this number increase as more work is done that was previously covered by GovComms. ### Contingency Planning We have provided BasePlus, Base, and SuperBear options. BasePlus is an 18.47% reduction from last year, Base is a 27.39% reduction, and the SuperBear option is a 39.19% reduction from last year. These values are beneath the suggested MIP40 options of 10% and 20%, respectively. We believe we can continue to provide value to the DAO at these spending levels. However, the SuperBear option will make it more difficult for us to continue to pick up ad hoc work outside of our mandate as well as absorb the work done by the offboarding GovComms Core Unit. ### Unwinding and Defunding Within one month of the ratification of an offboarding proposal, the Facilitators will submit a plan of approach to the governance forum, documenting the process for winding down the GovAlpha Core Unit. This plan will include line items of the necessary tasks to complete unwinding, a list of tasks and initiatives that require handover to another team, a projected timeline, as well as a cost estimate for completion of the wind-down proposal. The Continuity Buffer will be utilized for any spending during this period, meaning that any further transfers from the Surplus Buffer should be unnecessary and the remaining balance will be returned to the DAO along with any outstanding DAI in the Operational Wallet, minus the value of any agreed offboarding Golden Parachute. If a Golden Parachute is agreed that exceeds the value of the Continuity Buffer and/or holdings within the Operational Wallet, this should be transferred to the Operational Wallet in an Executive Vote as soon as practically possible. Any non-stablecoin tokens (e.g., ETH/MKR) in the Operational Wallet will be transferred to the Pause Proxy once appropriate disbursements have been made. ETH will be wrapped and sent to the Pause Proxy as WETH. Both active Facilitators seeded their signing wallets with 0.3 ETH from their own holdings. This ETH will be reimbursed before the return of any leftover ETH. If there is insufficient ETH in the wallet to cover this reimbursement, leftover DAI or USDC will be used to purchase ETH to cover the balance. Surplus stablecoins will be converted to DAI and returned to the Surplus Buffer via DssBlow. ### Proposal Parameters Instead of binary voting, this budget will use ranked-choice voting, with the options as follows: - A: Approve BasePlus Budget (904,805 DAI) - B: Approve Base Budget (805,805 DAI) - C: Approve SuperBear Budget (674,905 DAI) - D: Reject budget - E: Abstain In order for this Ratification Poll to conclude successfully and the contained proposal(s) move to Accepted status, each of the following conditions must be true: * `A`, `B`, or `C` vote-weight must exceed `D` vote-weight when the poll closes. * Winning vote weight must exceed the `Minimum Positive Participation` value of 10,000 MKR when the poll closes.